Practice Day Trading Using Market Replay For Forex, Futures, and Stocks

Day trading requires study and a lot of practice to get good at it. A Market Replay Simulator lets you download historical days and then trade them as if they were live. Similar to a demo account, Market Replay Simulators let you practice with no risk, but with the added benefit of practicing as much as you want, even on weekends.

Market Replay Simulators are one of the best ways to practice day trading to gain consistency. Here are some of the perks:

–Practice anytime you want. Even if you have a job and work during market hours, download historical days and trade them for practice (as if they were live) on evenings, weekends, or whenever works for you.

–Amp up your practice time with multiple sessions in one day. I only day trade for two hours a day, during a specific part of the day. If someone wanted to practice trading during that time, traditionally they would need to wait a full day to trade that 2-hour window again. Not so with a simulator. You could trade that 2-hour window for several different days, all on a Saturday.

–While a simulator can’t replicate the emotions of making and losing real money, it at least gives you an arena to practice the strategies you are working on and get better at them. Test out new strategy ideas and get used to different order types.

–If you are a seasoned trader that has hit a rough patch or wants to work on a certain part of your trading, a Replay Simulator works for that too.

–All the benefits of a normal demo account, but with the enhanced features discussed above.

–Many simulators have built-in trading statistics, showing you how many trades you won and lost, average profit/loss per trade and number of trades over a selected time period. This is beneficial for fine-tuning your trading, especially for seeing what holding winners a bit longer or cutting losses a bit sooner would do for your overall profit.

Best Way to Practice Day Trading for Consistency

Whether you day trade forex, futures, or stocks, there is a market replay simulator out there.

Forex: If you are interested in forex trading, the SoftFX Forex Simulator allows you to practice on MetaTrader4, which is a platform that most forex brokers provide by default. Access up to 10 years of historical trading days for 33 currency pairs and a number of commodities and stock indexes. The simulator provides tick-by-tick price data so you see every price move you would have seen had you been watching the live market that day. Spreads change, just like in live markets, and indicators move just like they would in real-time.

The software has a one-time fee of $99, giving continual access to all the great features. For a full list of features, visit the link.

Source: SoftFX

Futures: If you are more interested in day trading futures, there is a great simulator for you. NinjaTrader is a popular futures trading platform which also provides brokerage services. Within Ninja there is a feature called Market Replay Connection. Use it to download historical days for various futures contracts and then trade them as if they were live.

You may download NinjaTrader and practice on the Replay Connection for free by signing up for a product demo. The free trial period lasts for about 30 days. After the trial period ends you need to sign up for a new trial period.

Practice as much as you want for free, but if you decide to trade live on NinjaTrader you will need to buy the platform. The cost of the platform is a one-time fee of $999. If you opt to trade live through one of Ninja’s affiliated brokers then you may be able to use platform for free (no upfront cost), but trading commissions will be slightly higher than if you bought the platform.

This video shows how to use the Market Replay connection to practice your day trading. Place entry, stop loss and target orders in the Replay just as you would if trading normally.

Here are some common problems and fixes if the Replay Connection for NinjaTrader 7 doesn’t work. NinajTrader 8, the newest version of the software, is quite similar but there may be a few small differences between compared to what is discussed in the video and in the notes below.

–Make sure you have loaded futures contracts into your Instrument Manager under the Tools menu.

–Make sure the day you download is a trading day that occurred while that contract was actively traded.

–Set the chart to the same contract as the contract day you downloaded to trade.

–Make sure the “From” and “To” fields on the Replay Connection interface are set to the days you want. The “To” day is the day you want to trade and the “From” date is the day before.

–If the data looks wonky, reset both dates in the “To” and “From” fields.

–To start trading at a specific time, right-click on the Replay interface and select “Go To”. Make sure the date and time correspond to the day you want to trade.

–Remember, NinjaTrader is set to the time on your PC. Make any adjustments necessary to trade during the appropriate market hours.

Stocks: TradingView offers free demo trading and real-time data for some markets. It provides some free data for stocks, but traders will still likely need to pay for official live data if they want a realistic day trading experience. TradingView has a feature called Bar Replay which allows traders to watch historical data unfold. Unfortunately, the feature only unveils completed 1-minute bars consecutively, not tick data. This doesn’t provide a true representation of how buy and sell orders would have been filled. Even though this fault means most traders will outgrow this Replay feature quite quickly, it may be useful to some traders who are just starting out.

A more robust option is TradingSim. The cost of the program is $297 per year, per market. Trade any day from the last two years for stocks or futures (Ninja is better for futures Replay, since it is free). Do many of the things you would during a live day, such as creating watchlists and seeing the top stock gainers and losers for that day.

Source: TradeSim

Differences Between Simulators and Real World

Replay simulators are great in some ways because they aren’t like the real world. As mentioned, you can trade the specific part of a day–say the market Open–over and over again, or trade multiple Opens on the same practice day. You can try different orders types on the same market move (rewind and replay). If you make a mistake, you can rewind and fix it, creating a sort of mental muscle memory. You can practice your reaction time by trading specific entry strategies over and over again. Slow down and speed the price action to get a better feel for how the price is moving.

The downside is that a simulator can never give you the emotional experience you need to be a become a successful trader. To be successful, traders need to manage their emotions. That said, getting good in a demo account or simulator gives more confidence to implement the strategies in the real world. This may help alleviate feelings of anxiety or greed which can cause issues.

A simulator is also forgiving. If you make a mistake you can go back and fix it. This may give traders a false sense of how they are doing. Likely, simulator results will be much better than real world results once the trader starts trading with real money. Some simulators account for commissions, while others don’t.

Before taking any Replay results seriously, account for commissions, make sure the results don’t include re-do trades or days where you knew what happened, and also make sure that real market would have likely given you all the winning trades the simulator did. For example, you make a simulator trade with a 10,000 share position size and the simulator gives it to you, but the stock typically only has 100 or 200 shares at each price level. It is highly unlikely you could get in and out of that position in the real world as easy as the simulator made it seem.

Simulators also don’t replicate the daily routine of trading. Being a day trader means getting up a specific time each day and being ready to trade at a specific time. The real market doesn’t stop for anyone. If you have to go to the washroom and miss a trade, too bad. With a simulator you can pause, fast forward, and rewind. That’s a big advantage the real world, unfortunately, doesn’t offer.

Once you have practiced for several months and you feel ready to open an account, trade at least one month in a normal demo account. This mean trading at only the hours you will be trading the live market…with no fast forward or pause functions. This forces you to see what it is like to sit in front of your screen at that specific time of day, plan your food and washroom breaks in dull moments, and trade some market conditions you may not have seen before. If the month of live demo trading goes well, only then consider opening an account with real money.

Final Word on Practicing Day Trading Using Market Replay

Trading is an evolving skill. Slight changes in strategy are often required to adapt to new types of market conditions. It’s continual work to stay disciplined and focused. Just because you had a few profitable months doesn’t mean you get to relax. Keep practicing your day trading and honing your skill. Schedule practice sessions each week, or at minimum each month. Be honest with yourself about what areas you could work on. Download some Replay sessions and honing in on those specific issues. If you want to improve and gain consistency in your day trading, this is an excellent way to do it.

There’s no excuse not to improve. Take personal responsibility for your trading destiny. You wouldn’t expect to get to the NBA by just reading a few books and dribbling a basketball every once in a while. If you want to be good, you need to practice what you learn…A LOT! Trading is no different. Practice some strategies that you like over and over. The trader’s goal should not be to find the perfect strategy–which doesn’t exist–but rather to practice implementing and adapting strategies they like in a wide range of market conditions.

By Cory Mitchell, CMT

Check out my Forex Strategies Guide for Day and Swing Traders eBook.Over 300 pages of Forex basics and 20+ Forex strategies for profiting in the 24-hours-a-day Forex market. This isn’t just an eBook, it’s a course to build your skill step by step.

Some of the links in this article are referral links. Meaning VantagePointTrading may get paid a small fee if people sign up for services via links. All information provided in the article is deemed to be true and accurate at the time of writing, but products and companies change. Make sure to do your own due diligence and make sure these products are right for you before paying for them.

I am not sure what “forextester” you are talking about. But the site mentioned in the articles has a full list of features you can check out and compare to other software.

As for swing trading…I am actually not sure about that. I haven’t used any of the software like this for swing trading, only day trading. Typically days are downloaded one at a time…so not sure if a trade can be taken over two or three sessions (etc). Maybe shoot them an email to find out.

If you don’t mind, report back on what you find… because if it does work well for practicing swing trading (as well as day trading), then others will probably want to know!

ThinkorSwim also has an “OnDemand” button that allows you replay a day in the simulator. For those who have the demo platform, you’ll sometimes have delayed data or limited features which might not unlock this for you. So I’ve found that depositing the minimum of $50 in a TD account grants you full access to the platform – well worth it IMO and cheaper than other simulator alternatives. The downside to ToS is although it is very robust, it has a steep learning curve and a bit of a resource hog.

I’ve also tried the Tradingsim simulator as well – very intuitive, slick and easy to use. Would recommend this for those starting out.

Ninjatrader gets a bit tricky with the contract dates, rollovers, loading previous days data, etc. but Cory outlines how to do all of this well and after you get the hang of it, becomes pretty easy.

As someone who has struggled to identify a method best suited, now I know my personality for type of trader I suit, how do you overcome the frustrations of it not ‘clicking’.
I believe I am suited to be a day trader (Forex), but as simple as the concept is, I seem to misread the market, I understand it is a learning process, but how do you overcome the frustration to clear the way to make progress?

I guess my tipping point was realizing that I am trading on my own terms, not the market’s. I do what I need to do, and try not to get caught up in the market’s BS.
Let me use a hockey analogy to hopefully clarify my point. Let’s say you want to play in the NHL and be a goal scorer. You go and practice passes, your shots, different moves to get past defensive men and to fake out goalies. After months of practice you go and try all these things you have been practicing in a game with your buddies. Maybe you do ok, but Nothing seems to work like it did in your practice.

When you practice, things are static, and don’t change. But now, on a certain play you can’t use that shot that you practiced, or that fancy move because someone just knocks you off the puck.

So we need to realize that even though we practice, it will take awhile to bring all we have learned and actually make it work in a game. The next phase of the education is just riding along until we can implement what we practiced. Most times in a hockey game there is no opportunities to do all the fancy things we practiced. But once or a twice in an entire 60 minutes there is. We see the opportunity and implement what we practiced, and maybe we score a goal!

See the correlation to trading? It is about admitting when we don’t have a strategy for the particular conditions, and being content to sit and do nothing (this is the really hard part). And then also realizing what we have practiced and seeing the opportunities to implement that when conditions are ripe. Even if those conditions only materialize one or two times an hour we can do very well.

So in a sense, we are trading our game and we only play on our own terms…and all this happens within the bigger game (on our case, sitting in front of the screen). The rest of the time we are just skating around the ice making sure the other team doesn’t score. Unlike in hockey, retail traders can’t create opportunities, we need the market to present them. When it does, we implement our practiced plan. If we try to trade everything, it will never feel like it is clicking because our results will be poor and we never get really good at just implementing a few things very well.

Unfortunately, there is no fast solution, except to keep practicing certain moves/strategies, and then having the patience to wait until the game/market allows us to implement them. This too takes time and practice to get the hang of.

USE THE FRUSTRATION. The frustration tells you the market got the better of you. Start asking why it did? Look at your trades. Where the conditions right? Did you implement the strategy well? Sometimes even great opportunities don’t work out, and that is ok. But we definitely want to consider what is within our control to change. Focus on that. Look at your weaknesses and strengths, so you can use those to your advantage. That way, you are taking more control, and hopefully that will help alleviate some of the frustration.

As a side note, frustration in general comes from trying to control something that is OUTSIDE of our control. Focus on you, Keep practicing, and keep trying to implement your strategies only when your analysis tells you to do so. Always think about what is within your control. Maybe you have a profitable trade but you are frustrated because the price kept surging and you could have made way more. Based on your analysis and skill set could you have known that surge was coming? If not, it is outside your control. Take your profit and be happy. Most people’s frustration comes from the fact they THINK they could have done something better, when in the moment they actually could not (at least not with their current skill set). That is why I typically trade with fixed targets. The target is my best estimation of where the price is going. No matter how I feel after the trade, nothing changes the fact that that was my best target location at that moment. I traded my own game, and regardless of outcome, that is always the best option when looking at results over many trades.

Now if you continually notice certain errors or tendencies, then go through your trades and see how you could improve.